Mar 1, 2013

VietNamNet Bridge – The police have set up a committee to
investigate the origin of the fabricated information, speculation about that
the President of the Bank for Investment and Development of Vietnam (BIDV) was
arrested.

This news was announced by Police
Major General Nguyen Hung Linh, director of the National Security Police in
charge of fiscal, monetary, investment crimes (A84) under the General Security
2, Ministry of Public Security, on Feb 22 evening.

The police suggested that the
rumor may be part of a trick carried out by a group of stock investors and
financial speculators who might have earned hundreds of billions of dong just
by setting it up (VND100 billion = $4.8 million).

"Obviously those who set it
up are trying to undermine the market and affect national monetary security,”
Linh said.

"The false information not
only affects the personal and BIDV’s reputation, but also affects other people
and destabilizes the local financial market, so we the Ministry of Public
Security decides to search for those behind this,” he added.

He also added that this was a
serious incident so A84 will be cooperating with the other agencies to run the
investigation.

Meanwhile, the State Bank of
Vietnam (SBV) released a statement yesterday (February 22) revealing it is
ready and willing if intervention is necessary to stabilize the foreign
exchange market.

Rumor circulation on February 21
was that Tran Bac Ha, President of the Board of Directors of the Bank for
Investment and Development of Vietnam (BIDV) had been arrested.

Also during this session, rumors
of a high CPI rise in February, and an increase in the price of gasoline arose.

The monetary market was
immediately plunged into chaos. The stock market’s VN-Index lost 18 points –
the sharpest fall over recent six months.

The exchange rate also
skyrocketed to surpass the VND21,000/US dollar mark and people rushed to gold shops
for bullion.

Many banks, including Vietcombank
and ACB, also raised the price to the VND21,000 mark. At Eximbank, the USD
price at the end of the day was VND20,990 per dollar.

Local gold prices yesterday
continued to soar after the sudden rise in demand in Hanoi and Ho Chi Minh
City, widening the gap between the local and international price to some VND5
million a tael.

The local gold price has recently
been VND4-4.5 million a tael higher than its world counterpart.

The most severely affected
financial sector was the stock market, with the Hanoi and HCMC indexes,
HNX-Index and VN-Index, respectively, in a freefall.

The VN-Index saw the sharpest
decline since the one following the arrest of financial tycoon Nguyen Duc Kien
on August 23, 2012.

By the end of the session, the
VN-Index lost 18.1 points, or 3.66 percent, falling to 476.73 points, while the
HNX-Index fell 5.3 percent, the most in six months. Many investors are
concerned this will continue into the Friday session.

According to the Ho Chi Minh
Stock Exchange (HoSE), VND28.9 trillion in capitalization evaporated, falling
to VND780.1 trillion, a decrease of 3.57 percent.

Thus, Vietnam's stock market had
lost nearly VND33.8 trillion, or more than $1.6 billion, in capitalization by
the end of Thursday.

After the rumors were denied,
shares rallied on February 22, with VN-Index increasing 0.96 points. Commercial
banks lowered their exchange rates to below the VND21,000 per US dollar mark.

In a notice released by the State
Bank of Vietnam (SBV) on Friday morning, the bank said it is working with the
Ministry of Public Security to clarify the source of the rumor to coordinate
with ministries, its branches and local People's Committees to take appropriate
measures to strictly handle such illegal business, especially those in the
black market.

The bank also cautioned people
against acting on misleading information to avoid unwanted losses.

With around $30 billion in
foreign exchange reserves, the State Bank of Vietnam is capable of intervening
in case of volatility, SBV Vice Governor Le Minh Hung told the media.

An SBV official earlier also
confirmed that it is not the right time to adjust the exchange rate.

Source: SGGP

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